Microsoft Natal Set to Leave Sony Arc Behind – Analyst.

By the end of the year 2010 all three major video game consoles on the market will have some form of motion-sensing game controllers: Microsoft Corp. will have the most innovative, yet, the most questionable Natal, Sony Corp. will have Arc and Nintendo will keep offering its Wiimote with improved precision. Which of the three will be the most successful going forward? At least one analyst believes it will be Natal.

“I think that the Sony motion controller will have some problems gaining traction, since it is not an “in the box” solution. That will probably limit adoption to one or two million at the outset. Natal is different... It’s only one piece (the camera), is likely to be cheaper, and I think it will come in the Xbox 360 package with new consoles once launched, meaning far deeper penetration,” said Michael Pachter, an analyst with investment banking and brokerage firm Wedbush Morgan Securities, in an interview with PS3center.net web-site.

Microsoft Xbox 360 video game system is already rather inexpensive to make, granted that it will turn five years old this year and improvements in semiconductor process technologies as well as overall declines in pricing of electronics manufacturing. As a result, it will be rather easy for Microsoft to simply bundle its Natal with new Xbox 360 consoles in addition to sell them at a rather low price. This will mean that there will be more Natal devices sold compared to Arc, which will hardly be bundled with rather expensive PlayStation 3 systems. Therefore, Natal, may end up being more popular among gamers.

On the other hand, Natal is likely to be a more complex device to design games for compared to Sony Arc, therefore, it is hard to predict which controller will become more popular in the longer term. According to the analyst, Microsoft may simply subsidize development of next-gen Natal-based games to further boost its popularity both among developers and gamers.

“Sony’s internal development is top notch, so I expect the launch titles to be fun, and likely on par with Wii Sports for quality, but ultimately, I think that the motion controller will only sell to 20% or less of the PS3 audience, limiting its appeal to third party publishers. A year or so after launch, there will be 10 million [Natal units] out there, which will probably attract more third party support. Also, I think Microsoft will subsidize third party development to make it a success,” Mr. Pachter is reported to have said.

Sony Computer Entertainment specifically delayed the launch of its Arc motion-sensing controller from Spring 2010 to Fall 2010 in order to let the third-party developers to create games for the platform. However, Microsoft is also not standing still and foresees availability of many high-profile titles once the Natal is launched in Autumn 2010.

“The PS3 and Xbox 360 will run neck-and-neck for the next 6 months. Exclusive releases such as God of War III, Heavy Rain, MAG, and Gran Turismo 5 will help keep momentum in Sony’s favor through the summer months. Once the Natal is released, however, we do project that the Xbox 360 could regain the lead for a short period of time,” said Jesse Divnich, vice president of analyst services at EEDAR.